EconTalk Archives, 2009

VC funds invest large amounts of other people's money, and often are run by money-managers who have to invest in entrepreneurs that look the part.

Angels are often exited startup founders themselves, and invest small amounts of their own money, largely on a gut instinct. Unlike VCs, Angels don't care if their investment does not look "right" to others.

The best new ideas often sound crazy. Google and Facebook, for example, had to first raise money from angels because all the VCs told them "NO."

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